The Employees Provident Funds Act, 1952 and the Scheme framed thereunder were applicable to the petitioner's industry with effect from 1st November 1952 because the petitioner's industry was a factory engaged in an industry specified in Schedule I of the Act and in which fifty or more persons were employed. The petitioner was liable to pay its share of contribution in respect of the dearness allowance payable to the employees with effect from 1st November 1952 because Section 6 of the Act contemplated that the payment by the employer and the employees shall be equal up to the limit prescribed therein. The exemption granted by the Government to the employees from paying their share of contributions in respect of the dearness allowance did not exempt the petitioner from paying its share of contribution because the exemption was granted on equitable considerations and the petitioner had not recovered the employees share and it was not possible for the petitioner to make those recoveries with retrospective effect. The petitioner was not entitled to claim credit in respect of moneys remaining undisbursed to the employees, out of the amounts paid by the petitioner in respect of his part of the contributions because the statute provided that the moneys remaining un-disbursed to the individual employees shall stand to the credit of the reserve account of the Fund. The administrative charges were admissible and, therefore, could be recovered from the employees because the administrative charges were consequential upon the payment of the petitioner's share of contribution in respect of the dearness allowance payable to the employees.

Headnote:
EMPLOYEES PROVIDENT FUNDS ACT, 1952 - SCHEME FRAMED THEREUNDER - APPLICABILITY - EXEMPTION OF EMPLOYEES FROM CONTRIBUTION - LIABILITY OF EMPLOYER TO PAY HIS SHARE OF CONTRIBUTION - POWER OF GOVERNMENT TO REMOVE DIFFICULTIES - FORFEITURE OF ACCUMULATIONS IN THE FUND - ADMINISTRATIVE CHARGES.
Fact of the Case:

The petitioner, a public limited company, had two departments, one dealing in the manufacture of glassware and the other in the manufacture of metals. The company had started a private Provident Fund Scheme under the provisions of the Provident Funds Act of 1925. The Employees Provident Funds Act, 1952 came into force on 1-11-1952. The company continued the original Provident Fund Scheme. On 16-3-1955 the Regional Provident Fund Commissioner, Madhya Pradesh, Nagpur, made a demand upon the petitioner for contributions according to the scheme under the new Act in respect of both the aforesaid departments. The company filed a writ petition in the High Court of Judicature at Nagpur challenging the demand on the ground that the provisions of the Employees Provident Funds Act of 1952 were not applicable to the industry of the petitioner. The Division Bench of the Bombay High Court at Nagpur allowed the petition in so far as it related to the Glass-ware Department and exempted the company in so far as the workers working in that Department are concerned. The petitioner thereafter started making contributions as per the requirements of the scheme framed under the Act so far as the Metal Department is concerned. The petitioner paid a sum of Rs. 50,000 towards the demand for contributions made by the Regional Commissioner. The petitioners, however, disputed their liability (i) in regard to the contributions on the dearness allowance paid by the petitioners to their employees prior to 1-4-1955; and (ii) regarding the liability to pay administrative charges. The petitioners were also insisting that the employers contributions, which remained unpaid to the employees for some reason or other should be returned to the company and not forfeited to the fund. They also made a demand that the amount remaining undisbursed should be adjusted against other demand made by the Regional Commissioner. The company approached the Central Provident Fund Commissioner for clarification and also for decision of the points raised by them in their letter. As the company had not received any reply they sent a reminder on 30-4-1938. On 27th May 1958 the company paid a sum of Rs. 2,000 towards the partial satisfaction of the demand made by the Commissioner. On 4th October 1958 the company received a demand notice from the Tahsildar, Nagpur, for payment of a sum of Rs. 17,199.5 nP., which notice was received by the company on 7th October 1958. The company then approached the Commissioner with a request for staying the recovery proceedings for a period of ten days with a view to enable them to approach the High Court. Thereafter the company filed the present application under Articles 226 and 227 of the Constitution for the reliefs set out above.
Finding of the Court:

The court held that the Employees Provident Funds Act, 1952 and the Scheme framed thereunder were applicable to the petitioner's industry with effect from 1st November 1952. The court further held that the petitioner was liable to pay its share of contribution in respect of the dearness allowance payable to the employees with effect from 1st November 1952. The court also held that the exemption granted by the Government to the employees from paying their share of contributions in respect of the dearness allowance did not exempt the petitioner from paying its share of contribution. The court further held that the petitioner was not entitled to claim credit in respect of moneys remaining undisbursed to the employees, out of the amounts paid by the petitioner in respect of his part of the contributions. The court also held that the administrative charges were admissible and, therefore, could be recovered from the employees.
Issues: 1. Whether the Employees Provident Funds Act, 1952 and the Scheme framed thereunder were applicable to the petitioner's industry? 2. Whether the petitioner was liable to pay its share of contribution in respect of the dearness allowance payable to the employees? 3. Whether the exemption granted by the Government to the employees from paying their share of contributions in respect of the dearness allowance exempted the petitioner from paying its share of contribution? 4. Whether the petitioner was entitled to claim credit in respect of moneys remaining undisbursed to the employees, out of the amounts paid by the petitioner in respect of his part of the contributions? 5. Whether the administrative charges were admissible?
Ratio Decidendi: 1. The Employees Provident Funds Act, 1952 and the Scheme framed thereunder were applicable to the petitioner's industry with effect from 1st November 1952 because the petitioner's industry was a factory engaged in an industry specified in Schedule I of the Act and in which fifty or more persons were employed. 2. The petitioner was liable to pay its share of contribution in respect of the dearness allowance payable to the employees with effect from 1st November 1952 because Section 6 of the Act contemplated that the payment by the employer and the employees shall be equal up to the limit prescribed therein. 3. The exemption granted by the Government to the employees from paying their share of contributions in respect of the dearness allowance did not exempt the petitioner from paying its share of contribution because the exemption was granted on equitable considerations and the petitioner had not recovered the employees share and it was not possible for the petitioner to make those recoveries with retrospective effect. 4. The petitioner was not entitled to claim credit in respect of moneys remaining undisbursed to the employees, out of the amounts paid by the petitioner in respect of his part of the contributions because the statute provided that the moneys remaining un-disbursed to the individual employees shall stand to the credit of the reserve account of the Fund. 5. The administrative charges were admissible and, therefore, could be recovered from the employees because the administrative charges were consequential upon the payment of the petitioner's share of contribution in respect of the dearness allowance payable to the employees.
Final Decision: The application was dismissed.

JUDGMENT - 1. This is an application under Articles 226 and 227 of the Constitution of India for a writ of certiorari to quash the demand made by the Tahsiklar on 4-10-1958 for an amount of Rs. 17,199.5 nP. and also for a writ of certiorari and mandamus against the respondents Nos. 1 to 5 prohibiting them from taking steps against the petitioner for the recovery of the aforesaid amount.

2. The material facts may be briefly stated as follows: The petitioner, the Nagpur Glass Works (Ltd.), Nagpur, is a public limited company, registered under the Indian Companies Act, 1913. The Company has two departments, one department deals in the manufacture of Glassware and the other department deals in the manufacture of metals, such as, burners, lamps and lanterns. The first department is known as the Glass-ware Department and the second department is known as the Metal Department. The Company had started a private Provident Fund Scheme under the provisions of the Provident Funds ACT of 1925. This scheme inter alia contemplated contributions from the workers on the basis of certain percentage of their basic salaries, to which the company were to add an equal contribution. The Provident Funds Act No. XIX of 1952 was passed by the Central Legislature and came into being on 1-11-1952. The company continued the original Provident Fund Scheme. On 16-3-1955 the Regional Provident Fund Commissioner, Madhya Pradesh, Nagpur, made a demand upon the petitioner for contributions according to the scheme under the new Act in respect of both the aforesaid departments. Thereupon the petitioner company filed an application under Article 226 of the Constitution of India in the High Court of Judicature at Nagpur (Miscellaneous Petition No. 122 of 1956) praying for the quashing of the above said demand on the ground that the provisions of the Employees Provident Funds Act of 1952 were not applicable to the industry of the petitioner. The Division Bench of the Bombay High Court at Nagpur allowed the petition in so far as it related to the Glass-ware Department and exempted the company in so far as the workers working in that Department are concerned. The High Court held that the Act was not applicable to the Glass-ware section of the petitioners industry. The petitioner thereafter started making contributions as per the requirements of the scheme framed under the Act so far as the Metal Department is concerned. Actually, since six months prior to the decision of the High Court the company was making contributions in respect of the Glass-ware section as well. This they were doing under protest. After the decision of the High Court, the Regional Commissioner, who is the respondent No. 1, made a demand on 17-9-1957 in respect of the contributions payable by the petitioner in accordance with the Act. This demand included the petitioners contribution not only on the basic salary, but also on dear-ness allowance. After this in December 1957 the petitioner paid a sum of Rs. 50,000 towards the demand for contributions made by the Regional Commissioner. The petitioners, however, disputed their liability (i) in regard to the contributions on the dearness allowance paid by the petitioners to their employees prior to 1-4-1955; and (ii) regarding the liability to pay administrative charges. The petitioners were also insisting that the employers contributions, which remained unpaid to the employees for some reason or other should be returned to the company and not forfeited to the fund. They also made a demand that the amount remaining undisbursed should be adjusted against other demand made by the Regional Commissioner. There was some correspondence between the company and the Regional Commissioner on this point. It ap- pears that the Government exempted the employees from paying their share of contributions in respect of the clearness allowance from 1-11-1952 onwards but continued to insist upon the petitioner making payment in respect of the same. On 5-2-1958 the compan

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Judicial Analysis